UKX FTSE 100 Index

By Carla Mozee, MarketWatch

Stoxx Europe 600 aiming for best month in nine

European stocks pushed higher Friday, with banking shares faring well ahead of the release of stress-test results for the industry, leaving the market to march toward its best monthly performance in nine months.

The Stoxx Europe 600 rose 0.4% to 340.94, led by strength in the financial sector as bank shares moved up. The Stoxx Europe 600 Banks index rose 2.6%.

Lenders: Shares of Italian and Spanish banks were advancing. Italy's Banca Monte dei Paschi di Siena SpA (BMPS.MI) shares jumped 5.9% after the embattled bank said it received proposals related to its business (http://www.marketwatch.com/story/monte-dei-paschi-receives-proposal-from-ubs-2016-07-29) from Swiss bank UBS AG, as well as from a prominent former bank executive and government minister in Italy.

Monte dei Paschi's directors are slated on Friday to approve the bank's first-half earnings.

In Madrid, Banco Bilbao Vizcaya Argentaria SA shares (BBVA) (BBVA) climbed 4.1% as the lender's decline in second-quarter profit (http://www.marketwatch.com/story/bbva-profit-drops-82-but-beats-forecasts-2016-07-29) was less than had been anticipated by analysts.

Meanwhile, UBS climbed 2.4% after the lender's second-quarter profit decline was less than had been anticipated (http://www.marketwatch.com/story/ubs-earnings-decline-but-surpass-expectations-2016-07-29). Barclays PLC (BCS) (BCS) surged to the top of the Stoxx 600, climbing 8% as the British lender reassured investors about its strategy (http://www.marketwatch.com/story/barclays-profit-slips-on-hit-from-asset-sales-2016-07-29) in the wake of the U.K.'s vote last month to leave the European Union.

Bank executives and investors will look for the results of stress tests for 51 banks (http://www.marketwatch.com/story/europe-stress-test-results-to-put-spotlight-on-italys-troubled-banks-2016-07-28) from the European Banking Authority, due late Friday. The tests are aimed at revealing which lenders may need more capital to ride out a potential new economic crisis. Results for Italy's troubled banks will be in particular focus for investors.

It "could be in Italy's interest for [Monte dei Paschi] to fail these tests as Rome could then invoke a rule ... that would help protect bondholders from losses -- something that the Italian government is desperate to avoid," said Neil Wilson, markets analyst at ETX Capital, in a note.

"If it can get away with a bailout that shields investors it will be a win for [Italian Prime Minister Matteo] Renzi's government. And European Central Bank boss Mario Draghi seems not entirely chilly to the idea, saying earlier this month he backed a bail out in 'exceptional circumstances'", said Wilson.

The Stoxx Europe 600 was moving toward a July rise of 3.3%, which would be its largest monthly gain since a nearly 8% rise in October 2015, according to FactSet data. The index was on track for a weekly rise of 0.2%.

Economic data: Stocks were little changed after data from the European Union's statistics agency showed the eurozone's gross domestic product expanded 0.3% (http://www.marketwatch.com/story/eurozone-economy-loses-steam-inflation-stays-low-2016-07-29) in the second quarter, slower than first-quarter growth of 0.6%. The preliminary reading of second-quarter GDP did match expectations. Meanwhile, the flash inflation reading for July was 0.2%, higher than expectations of a 0.1% rise.

Some of the eurozone's GDP slowdown stemmed from an unexpected stall in French economic activity (http://www.marketwatch.com/story/french-economic-growth-stalls-unexpectedly-2016-07-29).

Indexes: Spain's IBEX 35 leapt 1.5% to 8,605.20 and Italy's FTSE MIB tacked on 2.2% at 16,871.42.

Germany's DAX 30 rose 0.3% to 10,307.76 and France's CAC 40 edged up 0.1% to 4,425.34. The U.K's FTSE 100 was swinging between gains and losses, recently shedding 0.1% at 6,713.20 (http://www.marketwatch.com/story/ftse-100-dips-but-barclays-gains-on-brexit-reassurance-2016-07-29).

The euro was buying $1.1115 compared with $1.1075 late Thursday in New York.

(END) Dow Jones Newswires

July 29, 2016 08:19 ET (12:19 GMT)

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